WHEAT

The wheat market continues to face bearish pressures, driven largely by renewed diplomatic efforts between Russia and Ukraine that could potentially ease Black Sea export disruptions. Reports indicate that both nations have expressed interest in a limited ceasefire targeting grain and energy-related infrastructure. Raising hopes for a gradual recovery in cargo movements. However, ongoing attacks on ports and vessels have tempered expectations of any near-term normalisation in Black Sea shipping. This uncertainty has kept global importers scrambling for alternatives, while traders remain cautious about the prospect of a durable resolution.

Crop-specific data paints a mixed picture. Russian wheat exports are projected to drop dramatically in September to just 1mmt (million metric tonnes), compared to 5.7mmt in the same month last year, according to the Russian Grain Union. Similarly, Ukrainian shipments are estimated at 1mmt, down by half from last year's levels. Meanwhile, US winter wheat planting progress is lagging at 17% completion versus a five-year average of 21%, as drought conditions persist across the Plains. Topsoil moisture remains critically low in Texas (89% rated short to very short) and Nebraska (43%), potentially limiting early-season sowing. Price movements reflect these dynamics, with Chicago Board of Trade (CBOT) December wheat futures settling down 8 and three-quarter cents to $7.08 and a half per bushel, marking a four-week low. Paris milling wheat also softened, closing 1.3% lower at €240.50 per tonne, as optimism around Black Sea diplomacy and a weaker euro against the dollar weighed on sentiment.

On the demand side, major wheat importers such as Egypt, Indonesia and Kenya are diversifying away from the Black Sea region, turning to higher-cost suppliers like Australia and Argentina. Indonesian millers have reportedly paid 20–25% more for Australian wheat, while Egypt has seen imports drop to 143,870 tonnes in early September versus 876,139 tonnes a year ago. The constrained Black Sea supply is driving up global wheat prices, though many buyers are hesitant to commit to bulk purchases, awaiting further clarity on the geopolitical front. In technical terms, bearish patterns persist across the wheat complex. Support levels are being tested across European and US markets. This aligns with broader market sentiment, where wheat is underperforming relative to corn and soybeans, as traders weigh the impact of Black Sea developments and the strength of the US dollar, which reached a two-month high yesterday, making US grains less attractive to overseas buyers.

BARLEY

• UK barley stocks increase, putting 2026/27 demand in the spotlight

The AHDB released their updated UK Supply & Demand figures this week including updated final closing stocks. Domestic demand declined versus the May update, as feed demand was marked down late in the season and feed barley lost ground in the feed ration versus feed wheat. The figures saw no change to 2025/26 malting demand versus the May update, a confirmation of a 19% decline year-on-year and a 500,000mt (metric tonnes) decline from the 2022/23 usage - more than a quarter of UK malting demand gone in three years. UK Barley Ending Stocks increased 5% year-on-year as a result of lower demand, much of which will have been malting barley. The 2026/27 harvest has seen malting supply thinned by a spring area reduction and poor yields and quality in key areas such as East Anglia. The market will be monitoring UK malting demand for the 2026 crop to see if these carry-over stocks will finally reduce heading into 2027 crop.

• Feed consumers take a step back from adding further cover

Since the later stages of harvest, feed consumers had been very active in the market covering in their positions out to December in particular. They now have good coverage on, so many consumers have become far less active over the last week than they were previously. Their cover into the New Year however is currently light, with some cover January to April. Consumers will be monitoring the logistical nightmare that is Russia and Ukraine's inability to ship via Black Sea ports and will be hopeful of a resolution and a change in market sentiment before they have to return and further buy in their forward demand.

OSR

The key global balance sheet is still bearish. Nearly 87mmt of global rapeseed production provides a clear ceiling to sustained futures upside. However, the additional supply is concentrated in origins such as Canada, while the EU remains structurally dependant on imports. They key question continues to be one of location and logistics rather than absolute global supply.

Canadian supply remains the main medium-term cap on futures. The Canadian crop is the largest single source of additional global supply and will continue to weigh on the market as harvest progresses. However, record Canadian crush demand and resulting increase in domestic oil and meal production should absorb a meaningful proportion of the crop.

Logistics continue to be important. Extremely low Rhine water and elevated Black Sea shipping risk mean that the timing and cost of physical supply are becoming increasingly important price drives. If Rhine conditions remain poor in the autumn, European crushers may need to compete more aggressively for available seed despite the large global crop.

The market is becoming increasingly two-speed. The fundamental backdrop argues against chasing a major futures rally, but nearby European physical values remain firm because of import requirements and logistics. In other words, global supply is bearish, whilst European replacement costs support the nearby.

PULSES

• Feed beans

Harvest is now largely complete across most of the UK, with only some later northern crops remaining to be cut. The hot and dry conditions have resulted in highly variable yields ranging from 0.5t/ha to 6t/ha depending on region, soil type and exposure to the intense drought and heat experienced this season. Current trade estimates suggest UK bean production could be below 380,000mt, which would leave domestic supply considerably tighter than initially expected, with little or no incentive for export.

With the smaller crop now becoming clearer, grower selling remains limited and trade is relatively slow. Values continue to have a strong premium against London wheat futures. At these prices beans remain expensive relative to alternative proteins such as soya, limiting inclusion in feed rations.

Dehulled bean demand remains subdued, with UK values currently uncompetitive and changes to feed formulations shifting demand towards alternatives such as wheat gluten.

• Human consumption

The hot and dry conditions severely impacted France and the southern and eastern half of the UK. Baltic countries escaped the worst of these conditions and look set for a good harvest in both quality and quantity. This region is therefore expected to supply much of the European requirement into North African human consumption markets in 2026/27, leaving UK beans relatively uncompetitive.

The Australian crop is reported to be in excellent condition, with significant volumes expected to become available for export around the turn of the year.

UK quality remains challenging following a hot and dry growing season, with bruchid damage, staining and blemishing limiting the volume available for human consumption. As a result, export opportunities are expected to be limited to small quantities of the best quality beans, with human consumption offers currently scarce.

FERTILISER

• EU gas market and effects on N, NS and urea production

At the time of the report, European gas prices have slipped back below €70 after trading above €80 only a few days ago. The reasons being discussed range from the possibility of a meeting between Iran and US, to unseasonably warm weather, shifts in German industrial gas demand, and suggestions that more liquified natural gas (LNG) cargoes have managed to pass through the Strait of Hormuz. Whatever the mix of factors, this week is another reminder of just how volatile this market remains.

European fertiliser producers have begun comparing the cost of imported ammonia with producing ammonia from European gas. The current advantage of imported ammonia is close to $300 per tonne. That is helpful for plants with access to import infrastructure, but many European sites are landlocked and cannot benefit. Even so, discussions across Europe, particularly from the second largest producer, indicate that plant cuts and curtailments are now firmly on the table.

The next steps depend heavily on geopolitics and weather. A shift to colder conditions would quickly change the EU gas balance and push prices higher again and colder weather is expected soon. For now, the market is moving on sentiment and short term signals, but the underlying risks remain unchanged.

• Deadlines looming closer than we realise

The last few days have seen a clear lift in farmer demand. Whether it’s the weather, drilling progress, or the number of deadlines facing the UK fertiliser industry, momentum has definitely improved. It’s worth stepping back and looking at those deadlines, then working backwards with a particular focus on fertiliser logistics.

The main deadline is the spring application window in February. That sounds a long way off, but for importers it isn’t. Demand is rising not just in the UK but across Europe and globally. We all draw from the same competing markets, each dealing with supply constraints linked to the Middle East and Ukraine.

The next deadline is Carbon Border Adjustment Mechanism (CBAM) year two for Europe and year one for the UK from 1st January. For UK farming, this means more imported fertiliser needs to arrive in UK ports before the end of the year. Working backwards from Christmas, the amount of available port storage, bagging capacity and haulage availability must be considered. December is always a difficult month for logistics, even when product is already in the country and ready to move.

Whilst we are in late September, imported volumes are behind compared to previous autumns, as it is held back by weaker early demand, the increased risk associated with global conflict and economic uncertainty. The question is whether imports can be ramped up in October and November. Later demand than usual creates a challenge for storage, bagging and haulage. Late arrivals of large cargoes put pressure on port space and bagging lines, and that assumes storage is even available given CBAM’s impact on other imported goods.

Specialist hauliers normally plan to move large volumes between June and September, but that demand didn’t materialise. Haulage between October and December is more difficult, especially this year with reduced capacity, tighter delivery windows, poorer weather and fewer daylight hours.

Another deadline is the number of working days available to move the order book before the Christmas break. A 50,000-tonne order can take up to 30 working days to clear. If the Christmas slowdown begins in the week of 21st December, then working backwards means new offers for delivery pre-CBAM would need to stop around the week of 9th November – a six-week deadline.

In summary, the supply chain needs more time than ever to hit the deadlines ahead. We’ve recently moved from a “little and often” buying strategy to encouraging 75–80% of annual requirements to be on farm before CBAM or at least confirmed for spring delivery in the case of liquid.

Please speak to your Frontier advisor or email us at info@frontierag.co.uk for more information or advice related to any of the topics and services mentioned in this report.

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